There may be more agreement

There may be more agreement between Messrs. Darling and Osborne than we suspected, it seems.

Without making any suggestion as to who copied whom, I have noticed that recently both of them have said that the main way to reduce the deficit and promote recovery is by way of economic growth. They both insist on cuts in wasteful spending within the public sector, in addition.

There the similarity ends, I suspect, with Darling going for higher taxes especially and Osborne going for reduced government expenditure.

I think that they both agree that it will be impossible to cover the present level of budget deficits by either taxation alone (say 40 pence in the pound on standard rate) or by cutting government expenditure (say a 20% reduction - the entire defence and education budgets together, say.)

So if growth is the way, there will be higher employment ( - only slowly, as it is an lagging indicator, and increase much more slowly than output), higher incomes, profits and spending, and therefor higher taxes.

The question is how to boost the economy without putting still further cash into it by the government. (our creditors are becoming restless and bodies like the IMF and OECD concerned. Here the Tories are surely right, backed up by many in the city, the best way is to reduce company taxation (which may require higher taxes elsewhere initially), make investment borrowing for businesses easier, and rapidly reduce the throttling red tape.